Energy Markets Try To Keep Upward Momentum

Following a strong rally ahead of the holiday weekend, energy markets are trying to keep their upward momentum, with limited success in the early going. U.S. stock indices are pointed to strong gains at the open, following a big rally in Asian markets, as optimism for recovery continues to outweigh fears of surging case numbers.
After lagging for most of the recovery rally, ULSD futures are now leading the move higher, reaching a four month high this morning. The near term technical test for distillates will be to close the chart gap between $1.30 and $1.38.
Baker Hughes report three more oil rigs were taken offline last week, bringing the total U.S. drilling count to a fresh record low. The Permian basin actually saw five rigs taken out of service last week, while other basins added two rigs in total.
The CFTC’s commitments of traders report was delayed due to the holiday last week. The ICE report showed money managers increased their net length in Brent crude oil contracts for a fourth straight week, but those combined bets on higher prices remain at the lower end of the seasonal range as large speculators remain cautious on energy prospects.
New lawsuits and reports continue to shed light on the meltdown in oil prices in April, which now appears to have been driven in large part by the latest in a long and infamous chain of retail investors being caught holding the bag by financial engineering gone wrong.
While oil prices have had their best rally on record since the April collapse, refiners are getting squeezed by the rising oil prices as finished products are struggling to keep pace, driving expectations for more refinery closures around the world as the industry is forced to consolidate.
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Energy Prices Tick Up as Holiday Travel Surges and Refinery Concerns Mount

Energy Markets Mixed As LCFS Prices Surge And Rig Count Falls
